UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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                                    FORM 10-Q

                                   -----------

     [X] QUARTERLY REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 2006

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM ___________ TO ___________

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                         COMMISSION FILE NUMBER 0-19564

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                       MUNICIPAL SECURITIES PURCHASE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  DELAWARE                                13-3633082
---------------------------------------------  -------------------------------
(State or other jurisdiction incorporation or  (I.R.S. Employer Identification
                organization)                                No.)

201 HIGH RIDGE ROAD, STAMFORD, CONNECTICUT                06927
-------------------------------------------------------------------------------
 (Address of principal executive offices)               (Zip Code)

       (REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE) (203) 357-4000

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                               TITLE OF EACH CLASS

                    COMMON STOCK, PAR VALUE $10.00 PER SHARE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No _.

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

Large accelerated filer _      Accelerated filer _       Non-accelerated filer X

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes _ No X.

At July 21, 2006, 10 shares of voting common stock, which constitutes all of the
outstanding  common  equity,   with  a  par  value  of  $10.00  per  share  were
outstanding.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED  DISCLOSURE
FORMAT.


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                                                                         PAGE

PART I.       FINANCIAL INFORMATION

Item 1.    Financial Statements

                Statement of Financial Position                             1
                Statement of Income                                         2
                Statement of Changes in Shareowner's Equity                 3
                Statement of Cash Flows                                     4
                Notes to Unaudited Interim Financial Statements             5

Item 2.    Management's Discussion and Analysis of Results
           of Operations and Financial Condition                            6

Item 4.    Controls and Procedures                                          7


PART II.      OTHER INFORMATION

Item 6.    Exhibits                                                         8
Signatures                                                                  9

Unless the context otherwise  requires,  the "Company,"  "Municipal-SPI,"  "We,"
"Us," or "Our" shall mean Municipal Securities Purchase, Inc.

FORWARD-LOOKING STATEMENTS

This  document  contains  "forward-looking  statements"  - that  is,  statements
related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance,  and often
contain words such as "expects,"  "anticipates," "intends," "plans," "believes,"
"seeks," or "will."  Forward-looking  statements by their nature address matters
that are, to different  degrees,  uncertain.  For us,  particular  uncertainties
arise from the behavior of financial markets, including fluctuations in interest
rates and from numerous  other  matters of national,  regional and global scale,
including those of a political,  economic,  business,  competitive or regulatory
nature. These uncertainties may cause our actual future results to be materially
different  than those  expressed in our  forward-looking  statements.  We do not
undertake to update our forward-looking statements.


<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                       MUNICIPAL SECURITIES PURCHASE, INC.

                         Statement of Financial Position

<TABLE>
<CAPTION>
                                                                    JUNE 30,        DECEMBER 31,
                                                                     2006              2005
                                                                  -----------       -----------
                      ASSETS                                      (unaudited)

<S>                                                               <C>               <C>
  Liquidity fees receivable                                       $   609,064       $ 1,149,615
  Due from GE Capital                                               1,491,167         2,854,275
                                                                  -----------       -----------
                  Total assets                                    $ 2,100,231       $ 4,003,890
                                                                  ===========       ===========

                      LIABILITIES AND SHAREOWNER'S EQUITY


  Deferred liquidity fee income                                   $   307,560       $   393,002
  Accounts payable and accrued expenses                                 7,000            13,700
                                                                  -----------       -----------
                  Total liabilities                                   314,560           406,702
                                                                  -----------       -----------

  Common stock, par value $10.00 per share. Authorized,
     issued, and outstanding 10 shares                            $       100       $       100
  Additional paid-in capital                                          822,145           822,145
  Retained earnings                                                   963,426         2,774,943
                                                                  -----------       -----------
                  Total shareowner's equity                         1,785,671         3,597,188
                                                                  -----------       -----------
                  Total liabilities and shareowner's equity       $ 2,100,231       $ 4,003,890
                                                                  ===========       ===========
</TABLE>

             The notes to unaudited interim financial statements are
                      an integral part of this statement.

                                       1


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                               Statement of Income

                                   (Unaudited)
<TABLE>
<CAPTION>

                                               --------------------------------     -------------------------------
                                                     THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                           JUNE 30                             JUNE 30
                                               --------------------------------     -------------------------------
                                                   2006              2005               2006              2005
                                               --------------    --------------     -------------     -------------

<S>                                            <C>               <C>                <C>               <C>
Liquidity fee income                           $   1,034,408     $   1,373,641      $  2,101,694      $  2,940,791
                                               --------------    --------------     -------------     -------------
             Total revenues                        1,034,408         1,373,641         2,101,694         2,940,791
                                               --------------    --------------     -------------     -------------

General and administrative expenses                   12,180             6,498            61,396            50,636
GE Capital commitment fees                            35,987            47,600            74,238           101,303
                                               --------------    --------------     -------------     -------------
             Total operating expenses                 48,167            54,098           135,634           151,939
                                               --------------    --------------     -------------     -------------

             Income before provision for
               income taxes                          986,241         1,319,543         1,966,060         2,788,852
                                               --------------    --------------     -------------     -------------

Income tax expense:
      Federal:                                       321,022           426,298           639,953           907,771
      State and local                                 69,036            91,677           137,624           195,220
                                               --------------    --------------     -------------     -------------

               Total income tax expense              390,058           517,975           777,577         1,102,991
                                               --------------    --------------     -------------     -------------

               Net income                      $     596,183     $     801,568      $  1,188,483      $  1,685,861
                                               ==============    ==============     =============     =============
</TABLE>

            The notes to unaudited interim financial statements are
                      an integral part of this statement.

                                       2


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                   Statement of Changes in Shareowner's Equity

                     Six-months ended June 30, 2006 and 2005
<TABLE>
<CAPTION>

                                                          ADDITIONAL
                                           COMMON           PAID-IN           RETAINED
                                            STOCK           CAPITAL           EARNINGS            TOTAL

<S>                                      <C>               <C>              <C>                 <C>
Balance, December 31, 2004               $      100        $822,145         $   5,614,291       $  6,436,536
Dividends paid (unaudited)                                                     (6,000,000)        (6,000,000)
Net income (unaudited)                                                          1,685,861          1,685,861
                                         --------------------------------------------------------------------
Balance, June 30, 2005 (unaudited)       $      100        $822,145         $   1,300,152       $  2,122,397
                                         ====================================================================

Balance, December 31, 2005               $      100        $822,145         $   2,774,943       $  3,597,188
Dividends paid (unaudited)                                                     (3,000,000)        (3,000,000)
Net income (unaudited)                                                          1,188,483          1,188,483
                                         --------------------------------------------------------------------
Balance, June 30, 2006 (unaudited)       $      100        $822,145         $     963,426       $  1,785,671
                                         ====================================================================
</TABLE>


            The notes to unaudited interim financial statements are
                      an integral part of this statement.

                                       3


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                             Statement of Cash Flows

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                       ---------------------------------
                                                                               SIX-MONTHS ENDED
                                                                                   JUNE 30
                                                                       ---------------------------------
                                                                           2006               2005
                                                                       --------------    ---------------
<S>                                                                    <C>               <C>

Operating activities:

Net income                                                             $   1,188,483     $    1,685,861
      Adjustments to reconcile net income to net cash
      provided by operating activities:
             Change in due from GE Capital                                 1,363,108          4,230,958
             Change in liquidity fees receivable                             540,551            173,540
             Change in deferred liquidity fee income                         (85,442)          (109,333)
             Change in accounts payable and accrued expenses                  (6,700)            18,974
                                                                       --------------    ---------------
                Cash from operating activities                             3,000,000          6,000,000

Financing activities:

      Dividends paid                                                      (3,000,000)        (6,000,000)
                                                                       --------------    ---------------
                Cash used for financing activities                        (3,000,000)        (6,000,000)

Net change  in cash and cash equivalents                                           -                  -
Cash and cash equivalents at beginning of period                                   -                  -
                                                                       --------------    ---------------
Cash and cash equivalents at the end of period                         $           -     $            -
                                                                       ==============    ===============
</TABLE>


            The notes to unaudited interim financial statements are
                      an integral part of this statement.


                                       4


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS


(1)           BUSINESS DESCRIPTION

              Municipal   Securities   Purchase,   Inc.   (the   Company)  is  a
              wholly-owned  subsidiary of GE Funding Services Inc. (the Parent),
              which is a  wholly-owned  subsidiary  of GEI,  Inc.,  and in turn,
              wholly owned by General Electric Capital Corporation (GE Capital),
              the ultimate parent of which is General  Electric Company (GE). In
              the  fourth  quarter  of  2003,  FGIC  Securities  Purchase,  Inc.
              (FGIC-SPI) changed its name to Municipal Securities Purchase, Inc.
              The Company provides liquidity for certain floating rate municipal
              securities whereby the Company will, under certain  circumstances,
              purchase  such  securities  in the event they are  tendered by the
              holders  as  permitted  under  the  terms of the  respective  bond
              indentures.  As of June 30,  2006,  the Company had  approximately
              $2.0  billion (par amount and  interest) of potential  obligations
              under  such  arrangements.  When  issued,  each  of the  liquidity
              facilities  had a  term  not  exceeding  five  years  (subject  to
              renewal). In order to obtain funds to purchase the securities,  in
              the event such  purchases are  necessary,  the Company has entered
              into standby loan agreements with GE Capital totaling $2.0 billion
              as of June  30,  2006,  under  which  GE  Capital  is  irrevocably
              obligated  to lend funds as needed for the Company to purchase the
              securities.

              BASIS OF CONSOLIDATION

              The  preparation of financial  statements in conformity  with U.S.
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions  that affect  reported  amounts and
              related  disclosures.  Actual  results  could  differ  from  those
              estimates.

              The  unaudited  interim   financial   statements  of  the  Company
              contained in this report reflect all normal recurring  adjustments
              necessary,  in the opinion of management,  for a fair statement of
              income, financial position and cash flows. The results reported in
              these  quarterly  financial  statements  should not be regarded as
              necessarily  indicative  of results  that may be expected  for the
              entire year. We label our quarterly  information  using a calendar
              convention,  that is, first quarter is labeled as ending March 31,
              second  quarter as ending on June 30, and third  quarter as ending
              on  September  30. It is our  longstanding  practice to  establish
              interim  quarterly  closing dates using a fiscal  calendar,  which
              requires  our  business to close  their  books on a Saturday.  The
              effects  of this  practice  are  modest  and only  exist  within a
              reporting year. The fiscal closing calendar from 1993 through 2013
              is available on our website, www.ge.com/secreports.

              These unaudited  interim  financial  statements  should be read in
              conjunction  with  the  financial  statements  and  related  notes
              included in the 2005 Form 10-K.

(2)           INCOME TAXES

              We are  included  in GE's  consolidated  U.S.  federal  income tax
              return under an intercompany  tax-sharing agreement. The provision
              for current tax expense  includes  our effect on the  consolidated
              return. We provide for taxes as if we filed a separate return.

                                       5


<PAGE>


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
              FINANCIAL CONDITION

              RESULTS OF OPERATIONS

              REVENUES

              We  provide   liquidity   facilities  for  certain  floating  rate
              municipal securities whereby we will, under certain circumstances,
              purchase  such  securities  in the event they are  tendered by the
              holders.  We  earn  liquidity  fees  from  the  issuers  of  these
              securities,  municipal  governments in the U.S., for providing the
              liquidity facilities.

              During 2005 and the  six-months  ended June 30,  2006,  we did not
              commit to any new liquidity facilities.

              We earned  liquidity fees of  approximately  $2.1 million and $2.9
              million  during  the  six-months  ended  June 30,  2006 and  2005,
              respectively   and  $1.0  million  and  $1.4  million  during  the
              three-months ended June 30, 2006 and 2005, respectively. The total
              liquidity  facility in force as of June 30, 2006 and June 30, 2005
              was approximately $2.0 billion and $3.1 billion, respectively. The
              decrease in liquidity fees from 2005 to 2006  corresponds with the
              respective  decrease in liquidity facility in force. This decrease
              is due to maturity of underlying liquidity facilities.

              OPERATING EXPENSES

              We incurred  $135,634  and  $151,939 of total  operating  expenses
              during the six-months  ended June 30, 2006 and 2005,  respectively
              and  $48,167 and $54,098  during the  three-months  ended June 30,
              2006 and 2005, respectively.  Included in total operating expenses
              were  commitment  fees owed to GE Capital  under the standby  loan
              agreements,  which  are based on the  outstanding  par in force on
              each of the liquidity  facilities at a rate of 0.625 basis points.
              Commitment fees were $74,238 and $101,303 for the six-months ended
              June 30, 2006 and 2005, respectively,  and $35,987 and $47,600 for
              the three-months ended June 30, 2006 and 2005,  respectively.  The
              decrease in commitment fees from 2005 to 2006 corresponds with the
              respective decrease in liquidity fees earned,  which is also based
              upon  the  par  in  force  on  each  of the  liquidity  facilities
              outstanding.  Total operating  expenses also includes  general and
              administrative   expenses,  which  are  principally  comprised  of
              intercompany    overhead   expense    allocation.    General   and
              administrative   expenses   were   $61,396  and  $50,636  for  the
              six-months ended June 30, 2006 and 2005, respectively, and $12,180
              and $6,498 during the  three-months  ended June 30, 2006 and 2005,
              respectively.

              INCOME TAX EXPENSE

              The statutory U.S. Federal tax rate during the three-months  ended
              June 30, 2006 and 2005 was 35%. Our  effective tax rate was 39.55%
              including the net effect of state taxes.

              CAPITAL RESOURCES AND LIQUIDITY

              Liquidity is a measure of the ability to generate  sufficient cash
              to meet cash  obligations  as they come due.  The  largest  use of
              potential  liquidity  would be if we were required to purchase all
              securities under the liquidity facilities issued. Since inception,
              we have not been required to purchase any  securities.  If we were
              required to purchase such securities, we would draw on the standby
              loan agreements with GE Capital. Since the standby loan agreements
              with GE Capital are  irrevocable  during the period the  liquidity
              agreements are

                                       6


<PAGE>


              outstanding,  we believe we have sufficient liquidity in the event
              that we are  required to fund any draw downs  under the  liquidity
              facilities issued.

              Our other  primary  source of cash is from  liquidity  fee income,
              which we lend to GE  Capital.  We  believe  that such  income  and
              access to the intercompany  receivable from GE Capital ($1,491,167
              at  June  30,  2006)  is   sufficient  to  fund  our  general  and
              administrative expenses.

              Net cash provided by operating activities was $3.0 million for the
              six-months  ended June 30,  2006 as we  collected a portion of the
              intercompany receivable from GE Capital. We used the cash to pay a
              $3.0 million  dividend to the Parent,  resulting in a $3.0 million
              financing cash outflow during the six-months  ended June 30, 2006.
              There were no cash flows related to investing  activities  for the
              six-months ended June 30, 2006.

ITEM 4.       CONTROLS AND PROCEDURES

              Under the  direction of our Chairman of the Board  (serving as the
              Principal  Executive  Officer) and Vice  President  and  Treasurer
              (serving as the Principal  Financial and Accounting  Officer),  we
              evaluated  our  disclosure  controls and  procedures  and internal
              control  over  financial  reporting  and  concluded  that  (i) our
              disclosure  controls and procedures  were effective as of June 30,
              2006,  and (ii) no  change  in  internal  control  over  financial
              reporting  occurred  during the quarter ended June 30, 2006,  that
              has  materially  affected,  or is reasonably  likely to materially
              affect, such internal control over financial reporting.

                                       7


<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS

              Exhibit  31(a) -  Certification  Pursuant to Rules  13a-14(a)  and
              15d-14(a) under the Securities Exchange Act of 1934, as Amended.

              Exhibit  31(b) -  Certification  Pursuant to Rules  13a-14(a)  and
              15d-14(a) under the Securities Exchange Act of 1934, as Amended.

              Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350.

                                       8


<PAGE>


                                   SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                       Municipal Securities Purchase, Inc.
                       -----------------------------------
                                  (Registrant)

July 24, 2006                      /s/ LeAnn Rogers
-------------                      ----------------
Date                                        LeAnn Rogers
                                            Chairman
                                            (Principal Executive Officer)

July 24, 2006                      /s/ Peter Graham
-------------                      ----------------
Date                                        Peter Graham
                                            Vice President and Treasurer
                                            (Principal Financial and
                                            Accounting Officer)

                                       9